Browsing by Subject "Financial analysis"

Now showing 1 - 4 of 4
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    A Financial and Economic Assessment of the Conservation of Northwestern Madagascar Mangroves
    (2016-04-29) Witt, Emily
    Programs such as REDD (reducing emissions from deforestation and forest degradation) that provide financial incentives to maintain natural carbon stocks are being implemented worldwide to address climate change and the conservation of threatened ecosystems. In developing countries, where the relative cost of conservation is high, these programs are especially attractive to promote sustainable resource use and prevent conversion of valuable ecosystems to other land uses. To incorporate REDD effectively in these areas, the financial costs and benefits resulting from the project implementation needs to be accessed. Quantification of income received from ecosystem services under baseline and project scenarios needs to be estimated, along with other costs of conservation management in order for a comprehensive comparison to be done. Ensuring that the project not only generates additional value, but also promotes the livelihoods of communities that rely on these ecosystems is key to the long-term sustainability of conservation efforts. This report serves as a cost-benefit analysis case study in Ambro-Ambanja Bay, Madagascar. This financial analysis looks at Blue Ventures’ proposed conservation of mangrove forests in Northwestern Madagascar using a REDD project. Project cash flows center around net income derived from certain ecosystem services, carbon income generated from REDD and project implementation and transaction costs. One limitation of this analysis is the exclusion of several partial, indirect and non-use ecosystem services provided by the Ambro-Ambanja Bay mangrove forest. To address this, a total economic valuation framework of all ecosystem services provided by Ambro-Ambanja Bay mangroves was created to provide additional insight into the entire estimated value of healthy mangrove forests. The first chapter of this report provides a background on mangrove ecosystems, the state of Ambaro-Ambanja Bay mangroves, and the general objectives of the proposed project. The second chapter provides an overview of methods used to estimate deforestation, methods used to derive the net income generated from various ecosystem services, and estimates of the costs associated with the project. The chapter details how these costs and benefits were derived under the baseline and project scenarios to provide insight on the impacts the two scenarios have on the estimated financial cash flows. The third chapter consists of a financial analysis of the project from the perspective of each of the major stakeholders. The financial assumptions are stated along with an overview of the government, project developer and community perspectives. Costs and benefits for each perspective were summarized in the form of net present values (NPV), which were calculated under various scenarios. It was found that the project was profitable for the government and community perspectives, and breakeven for the project developer, when carbon income was included. Major differences in NPVs between the assorted scenarios were analyzed and the sensitivities of those NPVs to changes in the stated assumptions were also tested. The fourth chapter details a proposed framework for valuing the additional ecosystem services that were not valued in the initial cost benefit analysis. An overview of those ecosystem services along with the various methods chosen to value each service is discussed. Benefit transfer was the main method employed to value the partial, indirect and non-use services. The section then details what literature estimates, data and calculations were used or are needed to derive the annual per hectare value provided by each service from healthy Ambaro-Ambanja Bay mangroves. The fifth chapter identifies the aspects of the project that might introduce risk to the long-term sustainability of the project. These risks include delayed benefits from the community perspective due to a 14 year project payback period, heavy reliance on carbon credit income for project profitability from the community perspective, and reliance on donor funding to break even from the project developer perspective. Proposed management considerations to mitigate these risks include project refinancing, potential development of an additional project income generating activity, and diversification of donor funding sources. This report makes several key points and recommendations: • Analyzing project profitability from the perspective of all major stakeholders is important in identifying where potential risks lie and who will be bearing those risks. • Although measures of net present value provide a simplified summary of the total discounted value received, it is critical to look deeper into the characteristics of the distribution of costs and benefits over time and the impacts it might have on stakeholders, especially those that are risk-averse. • Assumptions based on extremely volatile and new markets, such as the Voluntary Carbon Market, need to be made with caution and tested for project sensitivity. • Estimation and assessment of the total economic value (TEV) of all of the ecosystem services is needed to determine the true value of healthy mangroves in Ambaro-Ambanja Bay. The indirect value of these services and the impact of deforestation on that value need to be considered by the stakeholders.
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    Financial and Economic Analyses of Biogas-to-Energy Projects in Brazil
    (2011-04-29) Lassner, Karina
    The Alegria Wastewater Treatment Plant (WWTP) is one of the largest wastewater treatment plants in Brazil. It is owned by the Companhia Estadual de Aguas e Esgotos, the state agency that manages and treats most of the sewage water in Rio. Sewage at the WWTP is treated through several different processes, including sedimentation tanks and anaerobic reactors. A byproduct of sewage treatment via anaerobic digestion is biogas. After it is processed to required standards of purity, biogas becomes a renewable fuel for electricity generation or a substitute for natural gas. Currently, Alegria WWTP flares the biogas produced in the anaerobic reactors. In doing so, the WWTP is incurring operational costs and wasting a valuable source of energy. However, looking into the future, Alegria WWTP intends to use the energy stored in the biogas to generate electricity or natural gas. This study aimed to analyze what is the best use of the WWTP’s biogas from both the financial and economic perspectives. A discounted cash flow (DCF) analysis was used to compare the net befits of a biogas-to-electricity project (Green Electricity Project) and a biogas-to-renewable natural gas project (RNG Project). Analyses of the CO2 emissions reductions from each project were also performed. The methods used in this study included on-site data collection, literature review and interviews with industry specialists. Results from the study showed that both projects have high and positive net present value. However, the RNG project generated larger benefits for both the private investor and the economy as a whole. With regards to the environmental benefits, the emissions reductions obtained through the implementation of an RNG project were also higher than for a green electricity project. By implementing an RNG project the Alegria WWTP will provide an environmentally and economically sustainable solution for biogas treatment and will serve as a model for other wastewater treatment plants in Brazil.
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    Financially Viable Sustainability Solutions in Multifamily Residential Properties
    (2018-04-27) Long, Adam; Walker, Colin
    Drucker and Falk is a family-owned real estate company that focuses on third-party fee management of multifamily properties. Through isolated LED retrofit projects, Drucker and Falk realized the environmental and financial benefits of sustainability projects and is now seeking to implement financially viable sustainability solutions for its whole portfolio of more than 350 properties. In order to provide solutions that work for all Drucker and Falk properties, this study created a best practices guide and interactive Excel-based models that Drucker and Falk can use to identify and analyze potential sustainability strategies. This project then conducted case studies, applying the provided tools to three Drucker and Falk properties in order to demonstrate the process and benefits of increased sustainability practices. The case studies revealed potential environmental benefits and cost savings in utility bill management, lighting retrofits, pool pump alterations, and future building design. The tools provided by this project, along with the case study findings, will be used as a foundation for additional analysis and implementation of sustainability projects across the entire Drucker and Falk portfolio.
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    Reforming Solar Net Metering
    (2021-04-26) Ghadiri, Franco; Krishnan, Akshay; Li, Ruoshui
    One of the important policies aimed at diversifying the energy resource mix, stimulating local economic growth, and encouraging private investment in solar energy is Net Energy Metering (NEM). Under current NEM policies, participating customers generating electricity to serve their load can receive a financial credit for any surplus energy that they feed back to their utility’s grid. Unfortunately, several studies have shown that NEM policies are regressive onto low-income, disadvantaged communities as the revenue loss for utilities causes them to raise electricity rates in order to recover their costs. To quantify how NEM schema can potentially change the grid power flow and lead to variance in grid congestion, Locational Marginal Price, and utility’s avoided cost, we conducted an optimal power flow analysis in a synthetic IEEE 30-bus grid under 192 scenarios for three States (CA, FL, & MA). We used NREL’s System Advisor Model (SAM) to create synthetic data of our transmission grid using both the electricity load of a combination of residential and commercial buildings within our 30-bus system, and the behind-the-meter solar PV production generated using PVWatts & PySAM tools. We evaluated NEM policies by performing a cost-benefit analysis from the perspective of the NEM customers, non-NEM customers and the utilities, to demonstrate how NEM policies result in a net cost. We proposed several recommendations that can be incorporated into future NEM tariffs that will make them more equitable for the non-NEM ratepayers.